This civilisation is finished: so what is to be done?

12 02 2019

Rupert Read, Environmental Philosopher and Chair of Green House Think Tank. The Paris Agreement explicitly commits us to use non-existent, utterly reckless, unaffordable and ineffective ‘Negative Emissions Technologies’ which will almost certainly fail to be realised. Barring a multifaceted miracle, within a generation, we will be facing an exponentially rising tide of climate disasters that will bring this civilization down. We, therefore, need to engage with climate realism.

This means an epic struggle to mitigate and adapt, an epic struggle to take on the climate-criminals and, notably, to start planning seriously for civilizational collapse. Dr Rupert Read is a Reader in Philosophy at the University of East Anglia. Rupert is a specialist in Wittgenstein, environmental philosophy, critiques of Rawlsian liberalism, and philosophy of film. His research in environmental ethics and economics has included publications on problems of ‘natural capital’ valuations of nature, as well as pioneering work on the Precautionary Principle.

Recently, his work was cited by the Supreme Court of the Philippines in their landmark decision to ban the cultivation of GM aubergine. Rupert is also chair of the UK-based post-growth think tank, Green House, and is a former Green Party of England & Wales councillor, spokesperson, European parliamentary candidate and national parliamentary candidate. He stood as the Green Party MP-candidate for Cambridge in 2015.

About the series Shed A Light is a series of talks that seek to present alternative framings of future human-nature interactions and the pragmatic solution pathways that we could take to get there. By recognising the interlinkages between struggles for ecological, social and economic justice in addition to the desperate need for immediate societal transformation, Shed A Light aims to engage everyone with the green agenda and prompt broad-based discussions on sustainability issues. Filmed at Churchill College, 7 November 2018.


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12 02 2019
peralmgren

There is a way out of a lot of problems now arising and it is to introduce a new taxation system that will enable us to meet the challenges of detoriating environment and at the same time be economical beneficial to the 99 % of the population. Here is how:

We need a completely new social economy
Version date January 16, 2019
By Per Almgren, MSc
We have a fundamental error in our economy, that the private ownership of money or other assets entitles an income in proportion to this ownership. Usually in the form of interest on money or profit distribution on holdings of shares. In return, the owner does not perform any socially beneficial performance in his or her ownership role.

We will not be able to cure the severe environmental and rising health and food supply problems without changing the basic principles for the money economy.

The companies receive most of their income from the public sector and those living in the country. The public sector receives its income from companies and residents. But residents receive their income from the companies and from the public sector. The companies are expected to profit and, in Sweden, even the public sector is expected to surplus over a business cycle. Exports and imports are later dealt with in this text.

This is a growing problem that cannot be solved with an endless growth that almost everyone hopes will cure the social problems. Profits and surpluses in an activity only arise when revenues are greater than costs. If most of the population is expected to pay more than they get through salaries, wages and contributions, then they must borrow money to do this.

It is still a small group of citizens who really benefit from the current economic system. The data on the distribution of income statistics collected by Statistics Sweden in 1993, the last year that it still was paid wealth tax in Sweden, showed that about two (2) percent of households had higher income from interest and dividends than, on average, the interest and profit part costs for the products they could buy for their total income. In the U.S. the real winner group might be less than 0.5 %.

In the individual cases, of course, it depends on which goods and services you buy, but it shows that it is not a negligible problem. Since then, the size of the winning group has probably decreased as a percentage of the entire population. That is because those with high incomes do not buy goods and services for their entire income but use a part to instead earn even more income in the form of interest and dividends due to increasing shareholdings and savings.

Should they use the entire income for the purchase of goods and services, including tax payments, one might ask why a small minority should be able to live to a very high standard just because they happened to enter that situation for various reasons. But this would still be somewhat better than the situation we have today.

However, as described in the introduction, in Sweden it has been decided that both the central and regional governments and municipalities should have surplus targets and the owners of the companies almost always think that the most important is the dividend to the owners.

In total, this means that, on average, citizens must raise new loans each year in order be able to pay their interest, amortization and profits for companies and, in Sweden, the general government surpluses. In the US the government has during too many years borrowed more money each year and thus an increasing part of the taxes must be used for paying interest upon the loans. Or even worse, the government are forced to sell land and/or accept that large companies destroy the fundamental resources for future generations.

The banks create new money for most of this lending as follows:

The bank opens a new debt account for you that is empty. From this, they move the borrowed amount to an account that you have at the bank. You can then use this latter money to pay something and the bank has a new claim on you, the deficit on your debt account.

This situation will force most of the private persons, and in the US also the government, to increase their total debt every year. Most people in the different political parties in most countries might understand that the problems in the society must be solved but want to postpone the necessary actions until a later date in order not to embarrass voters before the next election.

The result will be a growing economic burden for the large majority and an increasing wealth for the small group of winners. During the history, such conditions usually results in revolutions and wars.

When the debt for a person becomes too large, the banks stop further lending to him or her and then more and more people will have to reduce their expenses, which means reduced revenues for both businesses and the public sector (lower VAT, revenues and income taxes). Companies then reduce their staff or force employees to accept declining wages.

Those who get the heaviest burden are those who initially have the least money.

We need an economy that can quickly solve the problem of job shortage and exclusion and at the same time provide us with tools for balancing our consumption with what nature can provide in the long run.

This means that the most economically disadvantaged will get a better life and those who have far more than they need must make the largest contributions to a smoothing of the economic levels among the population.

By changing today’s tax system and introducing an unconditional basic income, even for children, big enough to live from, we can achieve many good results.

A large reduction in working hours will be possible, supply support can almost cease but, of course, be maintained for those with special needs. Debt for studies disappears. The need for unemployment and health insurance will cease.

(In Sweden most of all hospitals are run by regional governments and you pay a symbolic fee amounting to 12 or 24 dollars for a visit and nothing for children and there are no fees for attending university education if you are a Swedish citizen or lawfully permitted resident.)

An economic basic security for all would release a quantity of human resources where we today have major shortcomings.

Today, administration, reporting and control take too much time from what really needs to be done. We can devote more time to developing ourselves and our children, living more environmental-friendlier and resource-tight, engaging in important social and cultural issues.
We remove VAT, employer’s fee, income tax, property tax and related administration. Instead, we introduce a fully automatic daily reduction of the number of money units found on all accounts and banknotes. This promotes low-cost supply of goods and services and allows for shortening of working hours.
The amount deducted is proportional to the amount of money in the account at a certain time in the night. 1 million USD on the account gives a reduction of 4,000 USD per day, 1,000 USD on the account gives a reduction of 4 USD per day. If you happen to have 1 billion in your accounts, the reduction will be 4 million USD. If the bank succeeds to lend 90 % of the money on your account, the reduction from your accounts will be one tenth of the numbers above.

A short nightly payment stoppage of transfers between accounts is introduced to prevent the calculation of the decrease in accounts from being disturbed. In the U.S. there might be necessary to have a small number of stops day and night due to large time differences between the east and west states.

A self-financing conversion system to accelerate the transition to a resource-saving society is introduced. Environmentally bad products will have to subsidize similar useful products that is environmentally better.

We do not need to keep a central track of how much money each person or business have, everybody will be “hurt” in proportion to what they have in their accounts and in the form of banknotes. All money, independent of how it is achieved or hidden, will continue to be taxed by the automatic fee.
This is technically easy to implement and will mean that the public sector could be provided with part of the automatically collected fees and new issued money at the same rate as the value of the circulating banknotes decreases. The other part of the fees should be used to pay out the monthly basic without causing inflation.

Already existing old banknotes can be used for 20 months after a reorganization according to this proposal. The “exchange value” will drop as described later in the next paragraph. When less than one tenth of the original value remains, the banknotes will be invalid. The same deadline may apply for new banknotes, which then will drop to zero value 20 months after the date of issue with an average daily decrease of 0.4 %.

For practical reasons, the banknote decrease time interval is gradually increasing. The first time with 2 % of the value after 5 days, the last time also with 2 % of the original value, but then with the new value, 10 % of the original, valid for 56 days after which the value will become zero money units.
When someone deposits money in a bank account and the bank lends a portion of these money, the depositor will only pay a fee on the part that is not lent. This means that all funds are not immediately available. The depositor must then make a balance between availability and the daily fee that will be deducted from the account’s balance sheet as well as the security to be provided for the loans lent.

The single lender/depositor may even accept a certain negative interest rate, as this will in any case be cheaper than the daily fee on the entire amount.
Export and tourist income can be placed on special accounts with a tax rate lower than that available for regular transaction accounts, the appropriate size may be 0.1 % per day. Import and payment for foreign travel etc., will be financed by such funds.

The government’s needs for foreign currency can largely be financed with the tax on such funds because the tax is levied in the current currency.
In practice, it will be difficult to spend money on tax havens.

However, the profit of export earnings may be left outside the country, but it means that the products become more expensive and thus less competitive, compared with products from companies that do not invest in tax havens and instead bring home their total income.

A consequence of this kind of financial system also means that it will almost automatically be a balance in foreign trade and tourism. More goods will be produced locally, which reduces transport needs, thus facilitating the effort to avoid environmental problems.

The land is municipalized to prevent speculation and environmentally harmful activities. It is leased to the users, with terms of use. However, the buildings and equipment installed on or in the ground can be owned privately. A model is the land-leasing system that has been around for many years in many major cities in European countries.

The rental price on land can be determined by public auction, the highest bidder receives the contract, if there is no such thing that the person or company, for heavy weight reasons, is unsuitable as a contractual part.
If any child or other close relative wishes to take over an activity or house that utilizes the land, they should be allowed to take over the contract if they are willing to pay for example at least 80 % of the sum proposed by highest bidder.

If a company is to be sold or settled, one or more employees, if they wish, have preferential rights to take over the company and land lease agreement if they are willing to pay a certain amount, for example, 80 % of the same tender amount.

We need neither growing private or public debt nor general economic growth for the social economy to work.

As previously described, the rate of reduction of accounts and banknotes is 0.4 % per day to cover the necessary public funding, including the payment of basic income. The decrease on accounts for received payments for municipalized land should be significantly lower, for example 0.01 % per day.

Deposit on these accounts can only be made by the central, regional or local governments and municipalities. Account holders can only make withdrawals.
Funds remaining in the basic income account when a person dies should be paid back to the central government. If someone wants to transfer his or her funds to relatives or other purposes, this should be done while you are able do it or to give another person authority to do so. This in order to prevent the emergence of large wealth concentrations not coming from work or gifts. If you have not lent the money, the personal reserve that can be built up on the basic income account will be approximately 9 months basic income.

The general price level should decrease 30 – 40 % after the change. The price level will then be stable, perhaps slightly declining due to improved methods of producing goods and services. It’s going to be hard to make money from just owning money, but more people will enjoy their lives.
The latest available data (year 2016) from Statistics Sweden (SCB) shows that the monthly basic income could have been about 10,350 SEK, i.e. 1,000 Euro or 1,220 USD for all citizens and lawfully permitted residents, also children, in Sweden.

As a smaller amount of total work will be required to do what really needs to be done, it will be easier to balance the use of natural resources that are being renewed and the ones we now use to an excessive extent. At the same time, more work can be done in areas of work that now have problems due to insufficient human resources.

The system described would, through the basic security created by the basic income, make it more attractive to live in areas now depopulated and reduce the pressure to make major investments in metropolitan areas.

It allows large income for those who want to work a lot but at the same time limits the ability to create wealth without working.

Since there will be no tax upon work income and the basic income size will not be affected by a work income, it is an immediate incentive to start working for those who manage and want. Sellers would like to give you a credit period and you will prefer to pay in advance.

The first country that introduce the above described system will be a lot more competitive in the international markets until other countries also copies the system.

“If the goal of social development would be that we all would work the maximum we were insane. The goal is to free man to create the maximum. Dance, paint, sing – Yes, whatever you want. Freedom!”

Ernst Wigforss, former Swedish Minister of Finance (Social Democratic Party) in 1925 – 1926, 1932 – 1936 and 1936 – 1949.

More about this, and a detailed mathematical-logical proof that interest upon money causes inflation and unemployment, not make them smaller, can be obtained from per.almgren@soceng.se

13 02 2019
MargfromTassie

Wow! Thanks for all this information. Interesting reading. Maybe if we had changed the way the economy works years ago…..but the unfortunate truth is that severe climate change is already locked in. And, because of the immense disservice to the natural environment that the Earth’s exploding population has caused, the 6th Great extinction is already underway and accelerating and we humans won’t be immune.

13 02 2019
MargfromTassie

It seems that Rupert Read as well as a few other scientists I’ve been reading/ watching lately are starting to believe in accelerated/runaway climate change and resulting economic and social chaos – perhaps not quite as soon as Guy MacPherson, but much much earlier than the IPCC has predicted.

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